Wednesday, November 22, 2017

The press communiqué issued after PM Deuba’s India visit in August 2017 stated that detailed project report (DPR) of Koshi High Dam would be finalized expeditiously. Expecting implementation of the project many became happy, while some opined that this project should not be undertaken at any cost. Those in favor thought it would help develop Nepal. While consultants, engineers, contractors, suppliers of equipment/materials, etc. and their brokers too were happy at the prospect of additional business including agency commission. Hydrocrats in general were happy, not merely because a project is going to be built, but perhaps at the prospect of additional under the table earning.

Amongst the naysayers, some worried on account of earthquake risk, while others were concerned about environment. It is not prudent not to undertake any development work due to such reasons. Prudent course is to take requisite precaution in implementing the project such. Japan is one of the countries fraught with high earthquake risk. But she has not stopped building physical infrastructure. Similarly, potential adverse environmental impact too should not discourage development; such impacts should rather be mitigated effectively. A project may displace thousands of people; the project should be built after properly resettling/rehabilitating displacees, if the project benefits hundreds of thousand people.

A large section of hydrocrats that brand this scribe anti-development would be surprised to read above lines. There are two types of development. First is in Nepal’s national interest (good development) and this scribe is in favor this type of development. This scribe, however, is against bad development. Latter type of “development” is Nepal’s national disgrace and such “development” should not be allowed to take place at any cost.

Reservoir project
With installed capacity of 3,300 MW, implementing this project entails building 269-meter high dam to impound 13.45 billion liter water, from which 0.546 million hectare land will be irrigated in Nepal and 0.976 million hectare in India, using lean season augmented flow. It will, reportedly, submerge one airport, 19 bridges and 196 square km of land in 80 villages of 11 districts and displace hundreds of thousand people.

Models of development
Barrages on Koshi and Gandaki rivers near Bhimnagar and Susta respectively (both close to Nepal-India border) were built by government of India in 1950s promising that electricity and water for irrigation shall be availed to Nepal. The model was “India will build project in Nepal and give something to Nepal”. Nepal is not receiving even a single drop of water for irrigation from Koshi barrage and she is supposed to receive 6.8 MW electricity from hydropower plant in Kataiya, India, using water from this barrage. Similarly, India has built a 15 MW hydropower plant on water from Gandaki barrage, which is currently generating less than 10 MW. While, although Nepal was slated to receive 20 cusec water to irrigate 40,000 acres land in Nepal from eastern canal, she is not receiving even one-fourth of that quantum.

Both of these dams are under Indian control and Nepal cannot open or close the gates of these barrages even when Nepal is inundated/flooded and local populace displaced. Under Koshi and Gandaki treaties, India is responsible for management, operation, repair and maintenance of these barrages including other physical structures. In effect, the land under these projects, in sovereign Nepal, is under Indian control.

India is proposing to build Koshi High Dam in this very model and Lampasarbadi (capitulationist or groveler) hydrocrats (politicos, bureaucrats, business community, pseudo intellectuals) are eager to accept this model. This model entails inundation and involuntary displacement in Nepal (negative externalities), while India will not only enjoy cheap electricity but also benefit from flood control and lean season augmented flow free of cost (positive externalities). Meaning while Nepal suffers the losses, benefits are hogged by India. This is an alternative (first) that Nepal should not touch even with a barge pole.

Indian security force
Indian security force is deployed for the security of both these barrages, which are in sovereign Nepal. This amounts to neocolonialism and, hence, unacceptable in this age. On 20 April 1969 late king Mahendra forced India to withdraw Indian security force deployed in 18 border check posts in Nepal’s northern border, but could not get India to withdraw from these two projects.

Koshi High Dam is to be built near Barahakshetra and its reservoir will extend deep into Nepal’s territory in north. Deploying Indian security force in this area will amount to rendering the area Indian colony, which is absolutely unacceptable.

In 1970s India was about to start building 10,800 MW reservoir project on Karnali River at Chisapani and about 500 Nepal students had already been sent to Roorkee (India) on scholarship for engineering degrees, to be employed in this project. But on learning that there was plan to deploy Indian security force in this project too, late king Birendra cancelled the project, according to former Indian external affairs secretary, Jagat Mehta.

No matter how much Nepal will become materially developed, such development is not acceptable if Nepal needs to mortgage/compromise her sovereignty. This will not be development but neo-colonialism. One cannot allow one’s mother to be raped (begging pardon for rather strong word) in the promise of wealth and prosperity. Therefore, projects in Nepal should be built under Nepal’s ownership to preempt deployment of India security force and to ensure that Nepal’s sovereignty is not impaired. An attempt is being made to conceptualize implementation model of this project without impairing Nepal’s sovereignty in following lines.

Lean season augmented flow
As mentioned above, India plans to irrigate 0.976 million hectares of land, for the purpose of which 325 cumecs (cubic meter per second) water is required for non paddy crop that uses comparatively little water. It must be remembered that water flowing in rivers in normal hydrological cycle bring flood, landslide etc. during rainy season (4-month monsoon period), while relatively little water flows rest of the year. Value of lean season augmented flow produced by building a reservoir is very high, for purposes like ensuring drinking water security, food security (intensive cropping with irrigation around the year) as well as navigation.

Production of lean season augmented flow involves opportunity cost in terms ranging from lost agricultural crop and forest products for close to a century as well as needing to rebuild alternative physical infrastructure. In this backdrop, downstream riparian countries like India and Bangladesh should recompense Nepal for the cost of negative externalities and share benefit of positive externalities. A prudent model of development of a project like Koshi High Dam should include a mechanism/formula for the purpose. Columbia treaty between Canada and USA or Lesotho Highland Water Project Treaty (with South Africa) could be replicated in this respect. If Lesotho model ($25 million for 18 cumecs) is to be emulated, India will have to pay Nepal $450 million/year for lean season augmented flow. Perhaps the formula could incorporate elements like irrigation and navigation benefit to both India and Bangladesh.

Flood control
Koshi River is known as “sorrow of Bihar” (India) and by building high dam in Nepal, flood control will be effectuated. Obviously, flood entails submergence of land in both India and Bangladesh, which results in involuntary displacement, resulting in loss of lives and property (agricultural crop and industries, infrastructure etc.) and resettlement and rehabilitation subsequent to flood is also costly. Both India and Bangladesh stand to gain from flood control if the high dam is built. Therefore, in order to persuade Nepal to build Koshi High Dam, both India and Bangladesh should assess damages related to flood and work out a mechanism to recompense Nepal.

Navigation
Nepal has been “cursed” by nature as a landlocked country. However, if this project is undertaken, ships, steamers, etc. can be operated from Chatara to open sea/ocean via Kolkata in India or Chittagong in Bangladesh. In this manner Nepal will rise from landlocked to water linked.
Both India and Bangladesh are having problem with inland navigation due to sediment-laden river with low water level. Subsequent to implementation of this project, this problem will get mitigated. An important pre-condition to implement this project will be to ensure unfettered right to access to open seas via India and Bangladesh for Nepal.

Use of electricity
The electricity generated by this project should be used to electrify Nepal to the fullest extent including to industrialize, to displace fossil fuel used by transportation, etc. and remaining could be exported to India and Bangladesh at avoided cost.

Financing model
It has been said that it would cost US$3 billion to implement; installed capacity 3,300 MW. It can be financed by borrowing $2.25 billion and investing $ 750 million as equity (75:25). As India is required to pay $450 million/year for lean season augmented flow to Nepal, she should advance $750 million to Nepal in order to enable Nepal to inject equity, subject to adjustment against future payments for lean season augmented flow to Nepal. This is best model from Nepal’s perspective.

Koshi treaty
As this project is one of the principal projects on Koshi river system, a review of Koshi treaty in this backdrop is warranted, which was initially signed in 1954 and revised in 1966. The revision (specifically Clause (i) of Article 4) “reaffirms Nepal’s water right over the entire Koshi Basin in Nepal, thus limiting India’s claim based on chronology of use or absolute riverian integrity.” In this manner the revised and updated treaty has reposed Nepal with full sovereignty over Koshi water; enabling Nepal to use Koshi water for any purpose including irrigation and India has right over remaining water only.

Besides, if India wishes to exercise prior use right, she is entitled to do so under current hydrological cycle. But India has no right over any additional water produced (lean season augmented flow) by building dam in Nepal over and above the quantum that India is currently receiving in dry season. In sum, if India wishes to use lean season augmented flow, she will need to agree to pay Nepal as described above.

Alternative model
In case the model proposed above is unacceptable to India (current model being unacceptable to Nepal); a third model can be structured. Lower the dam height to around 100 meters to generate about 1,000 MW (engineers to work out exact dam height and installed capacity) thereby reducing both inundation and involuntary displacement, to generate enough water to irrigate 0.464 million hectares in Nepal. It may cost $1 billion, to be financed with $750 million as loan and $ 250 million as equity.

Nepal should be prepared to increase dam height, installed capacity and lean season augmented flow if India and Bangladesh agree to recompense Nepal the cost of negative externalities and share positive externalities with Nepal.

National pride versus disgrace
GoN has started a practice of tagging “important” projects as national pride. Most parents consider their offspring ideal. However, it will be determined only by how the child behaves/performs after growing up. Similarly, a project cannot be deemed national pride, if it is detrimental to Nepal, deprives people of Nepal from water and electricity, favors neighboring countries at the cost of Nepal and so forth. Hence, each and every project needs to be structured such that it deserves to be tagged as national pride and ensure that it doesn’t become a national disgrace. Koshi High Dam too will become a national disgrace if it is built following the models of extant Koshi and Gandaki projects.
Ratna Sansar Shrestha FCA